Q2 COVID-19 Data: Michigan Credit Unions Help Main Street Stay Alive
Credit unions provide 10K businesses, 14K homeowners and more with essential services during the pandemic.
LANSING, Mich – (July 10, 2020) – When the COVID-19 pandemic hit Michigan in March, causing financial distress across the state through unemployment, the uncertainty of small business ownership, school closures and many other situations affected by the stay-at-home executive order. As a result, credit unions acted immediately, by guiding members through this difficult time, with mortgage assistance, emergency loans and assisting small business owners with Paycheck Protection Program (PPP) loans.
The Michigan Credit Union League (MCUL) has been tracking these credit union responses throughout the second quarter of 2020 and is pleased to report the following data illustrating the great works the Michigan credit union movement has done for members and small business owners.
During Q2, the state’s credit unions assisted more than 10,400 small businesses in attaining nearly $600 million in PPP loans, 10% of which are for new credit union members who found the help they need when turning to their local credit union. These loans helped keep many of Michigan’s Main Street businesses operating, with a median size around $20,000 per loan.
Additionally, credit unions throughout the state have done outstanding work assisting members with mortgage relief, making every effort to keep people in their homes during this crisis. An estimated 14,000 homeowners owing more than $1.9 billion in mortgage loans have received assistance with mortgage payment delays. Additionally, more than 300 homeowners had their foreclosures postponed.
Moreover, members in need were issued more than 250,000 skipped payments, resulting in more than $1 billion payment delays due to income loss-related financial hardship. In addition, credit unions offered another $22.5 million in emergency loans and $800 million in auto and consumer loan modifications. Skip-a-Pay services and loan modifications allowed struggling members to use these funds on immediate needs caused by the pandemic without incurring a penalty.
“These numbers are very powerful and speak to the overwhelming impact our not-for-profit movement has on the lives of millions of Michiganders,” said MCUL CEO Dave Adams. “Once again, we showed that when a crisis hits, you can always turn to your local credit union. Even outside of these product and service offerings, we have seen credit unions go to great lengths to make sure many of their members’ needs are met, financial and otherwise.”
From member credit union data surveying the second quarter from March 24 to June 30th MCUL reported these statewide highlights:
- Over 10,000 Paycheck Protection (PPP) loans for nearly $600 million have been made to very small businesses with an average of fewer than 5 employees. Median average loan sizes were $20,000 and one in ten businesses received financing from a credit union after being turned away by other lenders.
- The majority of Michigan credit unions have been voluntarily assisting financially impacted homeowners by delaying foreclosures and offering payment delay (forbearance) arrangements. More than 140 credit unions and support organizations signed on to the Governor’s April 23 MiMortgage Relief Partnership that sought to broaden these efforts to all mortgage loan servicers in Michigan.
- More than 14,000 families owing more than $1.9 billion in mortgage loans have received assistance with their mortgage payment delays (forbearance), and more than 300 foreclosures have been postponed due to financial hardship related to temporary income loss.
- On auto and other consumer loans, credit unions have allowed more than 250,000 skipped payments on loan amounts totaling over $1 billion in member assistance.
- Also, on auto and other consumer loans, nearly 80,000 loans, covering $800 million in outstanding loans, have had payment terms modified to provide financial relief.
- Emergency cash loans, usually carrying a zero-percent loan rate and deferred payments, were made to more than 9,500 financially impacted consumers on an estimated $22.5 million in loans, providing an average of $2,300 per borrower — essential funds for paying rent, other critical bills and just putting food on the table.
- Credit unions impacted members with more than 450,000 fee waivers for late payments, early CD withdrawals, Insufficient funds fees and ATM and overdraft fees, saving members more than $9.5 million.
- Credit unions are also stepping up their normal community service efforts, expanding support to organizations statewide with over $1.7 million in contributions, including an estimated $420,000 in support for first responders. These efforts have included the donation of gloves and masks, pizza lunches and snacks for healthcare workers, small grants for local restaurants and partnering with local radio stations to recognize and reward healthcare heroes.